Advice for People Seeking a Home Loan

 Are you sick of dishing on money every month without anything to show for it? Owning a home provides several benefits such as tax deductions, doing away with your landlord, and you can start building equity.

Owning a home for your the first time is exciting and nerve-wracking all at once. The first step to owning a home is deciding to buy. List all of the reasons why you want to buy a home. Determine the length of time that you want to live there. Does buying still seem like a good financial move? Can you afford a home that has everything on your list?

A good rule is that your mortgage should never be more than 1/3 of your net monthly income. Do you want or have children? Will you have a business now or in the future? These questions brings schools, neighborhoods, and economic factors into play that will affect the value of a home.

It is recommended to get pre-approved for a loan before you start looking at homes. Being pre-approved will show you your maximum budget for your home. This will prevent you from looking at homes outside of your budget.

So how do you begin? You start by contacting a loan officer at your local bank and submit an application. It's also important to work with people who you trust because this is a big investment. For comparison, it is recommended to check 3 or more banks and other lenders.

Getting pre-qualified for a mortgage loan will help greatly. A pre-qualification is a statement that qualifies you for a specific amount. The loan officer will write you a document showing this amount, and you can share it with your real estate agent.

You need to put yourself in a good position to get pre-qualified. This all starts will good financial management. Pay all your bills on-time and do not let your revolving debt exceed 30% of your net monthly income. You want to look as glossy as you can on paper. If approved, your credit score will also determine your interest rate.

Additional documentation or verification may be required. Common documentation includes past two years income tax reports, two of your most current paycheck stubs, and two months worth of bank statements. You will also need up to two forms of Identification.

Once you are pre-approved, you and your agent can start the search for your new home!
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